All Israeli banks are too big to fail, pyramids have political clout

09.10.2011                      12.Cheschwan. 5772

Wirtschaft:

All Israeli banks are too big to fail, pyramids have political clout

Yones confirms that even when the banks compete, private households do not particularly benefit from it.

The economic concentration committee published Tuesday the minutes of its meetings with business leaders, exposing some truisms about the state of the economy that certain business interests evidently tried to obscure over the last year. For example, Eli Yones, the chief executive officer of Bank Mizrahi-Tefahot, confirmed that pyramidal holding groups do wield political influence − and that the CEOs of Israel’s banks can be influenced by moves behind the scenes, out of the regulator’s watchful eye.
It would be better if there were no pyramids at all, said Yones, and if a controlling interest could only be conferred through holdings of 50% or more. ‏(In stacked “pyramid” structures of holdings, the company at the top effectively controls companies at the lower layers, even with holdings well under 50%.‏) “Of course we’d like everything to be flat, for each company to have a single owner and for the owner to engage only in that,” Yones said. But it isn’t practical for Israel, the banker said….